Just last week, I made fun of Paul Krugman after he publicly said that a fake threat from invading aliens would be good for the economy since the earth would waste a bunch of money on pointless defense outlays.
Yesterday, there were rumors that Krugman stated that it would have been stimulative if the earthquake had been stronger and done more damage, but he exposed this as a prank (though it is understandable that many people – including me, I’m embarrassed to admit - initially assumed it was true since he did write that the 9-11 terrorist attacks boosted growth).
But while Krugman is owed an apology by whoever pulled that stunt, the real problem is that President Obama and his advisers actually take Keynesian alchemy seriously.
And since President Obama is promising to unveil another “jobs plan” after his vacation, that almost certainly means more faux stimulus.
We don’t know what will be in this new package, but there are rumors of an infrastructure bank, which doubtlessly would be a subsidy for state and local governments. The only thing “shovel ready” about this proposal is that tax dollars will be shoveled to interest groups.
The other idea that seems to have traction is extending the current payroll tax holiday, which lowers the “employee share” of the payroll tax from 6.2 percent to 4.2 percent. The good news is that the tax holiday doesn’t increase the burden of government spending. The bad news is that temporary tax rate reductions probably have very little positive effect on economic output.
Lower tax rates are the right approach, to be sure (particularly compared to useless rebates, such as those pushed by the Bush White House in 2001 and 2008), but workers, investors, and entrepreneurs are unlikely to be strongly incentivized by something that might be seen as a one-year gimmick. Though I suppose if the holiday keeps getting extended, people may begin to think it is a semi-durable feature of the tax code, so maybe there will be some pro-growth impact.
In any event, we will see what the President unveils next month. I’ll be particularly interested in how his supposed short-run jobs proposal fits in with his long-run plan for dealing with red ink. He has been advocating for a “balanced approach” and “shared sacrifice” – but that’s Obama-speak for higher taxes, and we know that’s a damper on job creation and new investment.
As you can tell, I’m not optimistic. The best thing for growth would be to get the government out of the way. The Obama White House, though, thinks bigger government is good for the economy.
This stimulus video was produced last year and was designed for another jobs plan concocted by the Adminisration, but the message is still very appropriate.
The mini-quake came at a perfect time. Shovel ready potential for jobs to repair “all” the damage! The plan coming next month may prove to be no plan at all, just a rehash of slogans we have heard before. If anyone is hiding under a rock, this mess we are in will take years to correct and democrats will only perpetuate the pain by trying to throw tax dollars at the problem. Best advice is to stock up on canned goods, pay off all your debts and hunker down for the long haul. Like a homecoming game at Georgia playing Vanderbilt, you know you will win but you have to be willing to wait until the whistle blows.
Did you see this?
http://mashable.com/2011/08/24/obama-bush-voice-apps/
Since this morning over 10,000 people shared the launch.
Let me know if you need any quotes from us, I can put you in touch with someone from the iSpeech team.
It seems that Obama often talks of a “balanced approach” rather than a balanced budget. Most of us are probably not quick enough to notice there’s a big difference.
[...] of the debate. In the meantime, you can watch this video of me debunking Keynesian economics and this video eviscerating Obama’s faux stimulus. Rate this: Share this:PrintEmailFacebookTwitterMoredeliciousDiggFarkLinkedInRedditStumbleUponLike [...]
[...] is America’s best think tank, highlighting the fact that we took the lead in battling against Obama’s faux stimulus at a time when many were dispirited and reluctant to fight big [...]
[...] is America’s best think tank, highlighting the fact that we took the lead in battling against Obama’s faux stimulus at a time when many were dispirited and reluctant to fight big [...]
[...] is America’s best think tank, highlighting the fact that we took the lead in battling against Obama’s faux stimulus at a time when many were dispirited and reluctant to fight big [...]
[...] Obama’s two biggest “achievements” since taking office are the so-called stimulus and government-run [...]
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[...] projected that the unemployment rate today would be about 2-percentage points lower if the so-called stimulus was adopted, most people aren’t looking at the numbers [...]
[...] detail why the cartoon is accurate, this video on Keynesian economics is helpful, as is this video explaining the failure of Obama’s $1 trillion boondoggle. Rate this: Share this:PrintEmailFacebookTwitterMoredeliciousDiggFarkLinkedInRedditStumbleUponLike [...]
[...] been a big critic of Obama’s policies on taxes, spending, regulation, and intervention, so you won’t be surprised that I argued on CNBC that his [...]
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[...] By the way, if you want to understand in greater detail why the cartoon is accurate, this video on Keynesian economics is helpful, as is this video explaining the failure of Obama’s $1 trillion boondoggle. [...]
[…] By the way, if you want to understand in greater detail why the cartoon is accurate, this video on Keynesian economics is helpful, as is this video explaining the failure of Obama’s $1 trillion boondoggle. […]
[…] The election was not a mandate for Obamacare or the faux stimulus. The President spent almost no time bragging about the two biggest “accomplishments” of his […]